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NEW QUESTION: 1
A. 0
B. 1
C. 2
D. 3
Answer: C
NEW QUESTION: 2
A. 0
B. 1
C. 2
D. 3
Answer: C
NEW QUESTION: 3
The information below was taken from the bank transfer schedule prepared during the audit of Fox Co.'s
financial statements for the year ended December 31, 20X1.
Assume all checks are dated and issued on December 30, 20X1.
Which of the following checks might indicate kiting?
A. #101 and #404.
B. #101 and #303.
C. #202 and #404.
D. #202 and #303.
Answer: C
Explanation:
Explanation/Reference:
Explanation:
Choice "B" is correct. Kiting is concealing a cash shortage by depositing in one bank an unrecorded check
of another disbursement bank, so that the deposit is recorded in both banks. An auditor would most likely
detect kiting by reviewing the bank transfer schedule and following-up on all transfers for which the receipt
date per bank is recorded in the accounting period before the disbursement date. Checks #202 and #404
both meet this criterion and therefore might indicate kiting.
Choices "A", "C", and "D" are incorrect, based on the above Explanation.